893.102S/2233: Telegram
The Consul at Shanghai (Butrick) to the Secretary of State
[Received 6:30 p.m.]
856. Department’s 328, August 29, 7 p.m. received via Tokyo and repeated to Chungking, Peiping and Tsingtao for information of Commander-in-Chief.
[Page 796]Admiral Glassford has been kept informed and we have been in frequent consultation. This message has been prepared in collaboration with him.
1. So far as we are able to deduct here, there is no change in the Japanese attitude toward this problem outlined in Iwamura’s memorandum (No. 2) contained in my 811, August 21, 4 p.m. and which briefly is that the Volunteer Corps garrison Sector B or that Sector B be left without garrison and that the Marine forces and the Japanese forces act in Sector B when necessary. With the above in mind, and considering the Japanese concept of the special status of Japanese forces in this area as brought out in Iwamura’s statement of the Japanese position contained in my 789 [798], August 19, 4 p.m., and giving due consideration to the boring-from-within and other tactics frequently employed by the Japanese to attain their objectives, and considering further that in our opinion and with all due deference [to] the statements of the Japanese Minister for Foreign Affairs contained in Tokyo’s 756, August 27, 6 p.m. which has been repeated to Tsingtao for the Commander-in-Chief, there does not appear to us sufficient grounds for believing that the Japanese have receded from their position previously outlined in this telegram.
2. If the Department considers that conditions permit further negotiations here, we would greatly appreciate Ambassador Grew’s opinion as to the effect of his representations at Tokyo upon negotiations here.
3. The Japanese have not occupied Sector D and in general conditions in that area have been remarkably quiet recently. We cannot but feel that this has been accomplished through orders and for the purpose of citing an example of the efficacy of the police of the local régime in maintaining peace and order and as an argument in support of the Japanese formula for disposing of the Sector B problem. The active duty status of the Shanghai Volunteer Corps is already being felt by them as somewhat of a burden. It is understood that this feeling emanates not from the volunteers but from their employers, some of whom are loath to release their employees for volunteer duty. Prior to ordering out volunteers the Council had an informal poll among British and American members and the vote was only 4 to 3 in favor of calling out the volunteers. There exists a feeling in some quarters that unless the Marines take over Sector B it is best to come to terms with the Japanese and to become friendly with the Wang Ching-wei régime, which many quarters now feel will be dominant in this area for some time to come.
It is rumored that many prominent local Chinese have “made peace” with the Wang régime, presumably at a price.
[Page 797]American businessmen are convinced that unless the Japanese change their attitude toward American business soon, American businesses would find themselves in the same position in China as in Manchuria.
4. For the considerations mentioned in the foregoing paragraph, the element of time is important and it would seem advisable to initiate final conversations as soon as possible looking towards the solution indicated in the Department’s 328, August 29, 7 p.m.
Sent to Department. Repeated to Chungking, Peiping, Tokyo and Tsingtao for information of the Commander-in-Chief.